The UK’s 10-year gilt yield remained around 4.7% after the Bank of England kept interest rates steady as expected, signaling a gradual and cautious approach to further loosening amid persistently high inflation and weak growth. While there has been notable progress in disinflation in recent months, uncertainty around international trade policies increased following the US’s tariff announcement, which triggered responses from several governments and could drive further price pressures. Additionally, economic data continued to indicate growth weakness, as Prime Minister Keir Starmer struggled to rebuild consumer and business confidence. Meanwhile, investors processed new unemployment data, with the jobless rate holding steady at 4.4%, and wage growth slowing slightly to 5.8% including bonuses, while remaining unchanged at 5.9% excluding bonuses—both in line with expectations.
